UAE residents less confident about finances as living costs rise

More than 40 per cent of UAE residents are less confident about their financial status than a year ago as concerns surrounding the cost of living and job security increase, according to a new survey.

Comparison site Yallacompare’s consumer confidence tracker found that just 19.3 per cent of the 1,441 residents its surveyed were more confident about their financial health than in the first quarter of 2017.

This compared to 42.9 per cent that were less confident.

Cost of living increases and job security were found to be a significant worries for most respondents following the introduction of a 5 per cent value added tax rate in January and the weaker economy in recent years.

Nearly 30 per cent (29.8 per cent) of respondents said they barely noticed the additional cost of VAT.

However, UAE residents indicated they were sending less money home than last year and saved less.

Of the 81.3 per cent of residents that regularly send home money 35.9 per cent said they were sending less than 12 months ago, 33.5 per cent were sending the same and 30.6 per cent were sending more.

In addition, 58.9 per cent of residents that regularly save said they were saving less than last year, compared to 15.8 per cent that were saving more than 12 months ago. The majority (58 per cent) of residents said they failed to habitually save.

Elsewhere, 42.4 per cent of respondents said they had less credit card debt than the same time last year and 46.8 per cent had less loan debt, compared to about a third with the same amount of debt in each category.

However, one area where spending was found to be increasing was school fees, with 81.6 per cent of relevant respondents seeing an increase and 51.4 per cent considering a different school for their children as a cost saving measure.

The site found that despite the lower overall confidence and decreased savings and remittance potential seen in the survey only 24.4 per cent of respondents were more likely to leave the country in the months ahead.

More than four in 10 (42.2 per cent) were less likely to leave the country for the same region.

“A series of indicators on the tracker show a general lack of confidence around job security, the ability to keep up with the cost of living, and the prospect of a salary raise,” said Yallacompaare chief financial officer Jonathan Rawling.

“This means that UAE residents are now allocating their resources differently, based on their confidence levels.”